Abu Dhabi's Lunate launches global sukuk ETF to tap rising demand

Abu Dhabi-based Lunate Capital LLC is launching an exchange-traded fund tracking global Islamic bonds to tap the growing demand for stable investment opportunities in the region.

The Chimera JPMorgan Global Sukuk ETF is scheduled to list on the Abu Dhabi Securities Exchange on July 8. It aims to replicate the performance of J.P. Morgan Global Investment Grade Sukuk Index, which includes over 70 liquid, US dollar-denominated sukuk instruments.

Lunate Capital's parent company, Lunate Holding RSC Ltd., manages $105 billion through its subsidiaries.

Lunate is part of 2PointZero, a unit of International Holding Co. The alternative investment manager counts the emirate's sovereign wealth fund ADQ as one of its largest clients.

The new fund will be Lunate's 16th listed in the UAE, Sherif Salem, head of public markets said in a statement. The firm launched the first ETF tracking the performance of UAE bonds earlier this year.

The ETF's addition strengthens the emirate's position as a "hub for finance and investment and reflects the growing interest in ETFs as versatile investment tools," Abdulla Salem Alnuaimi, group chief executive officer of Abu Dhabi Securities Exchange, said in the statement. Currently, there are only a few ETFs tracking sukuk performance listed in the Middle East.

BNY will act as the global custodian for the Chimera JPMorgan Global Sukuk ETF, while International Securities, EFG-Hermes, Arqaam Securities, FAB Securities, Daman Securities and BHM Capital are the authorized participants for the fund. Investors can start subscribing from Monday.